Tribunal Decision: Input Service Credit Allowed, Except for Employee Insurance

The Tribunal allowed input service credit on various services utilized by the appellant, except for insurance cover for employees and their dependents. The decision was based on distinguishing between "inputs" and "input services," aligning with the appellant's position for most services but agreeing with the A.R. that insurance services were not directly related to the appellant's business activities. The appeals were disposed of accordingly, granting credit on services such as running and maintenance of barges and tugs, horticultural services, and canteen services, except for insurance services related to employees and their dependents.

---

---

Issues:
1. Denial of input service credit on various services under Rule 2(l) of the Cenvat Credit Rules, 2004.

Analysis:
The appellant appealed against the impugned order denying input service credit on services including running and maintenance of barges and tugs, insurance services, horticultural services, and canteen services. The appellant contended that all these services were utilized in their business activities as a manufacturer of excisable goods, citing the decision of the Hon'ble High Court of Bombay in the case of Ultra Tech Cement Ltd. The appellant had reversed the service tax amount on subsidized food provided through canteen services. On the contrary, the learned A.R. argued against the appellant's entitlement to input service credit, referring to the judgment of the Hon'ble Supreme Court in the case of Maruti Suzuki Ltd. v. CCE, Delhi. The A.R. specifically highlighted the insurance cover taken for employees and their dependents, asserting that it did not relate to the manufacture of final products and thus, the credit availed on insurance services was not admissible.

The Tribunal considered the arguments presented by both sides. It distinguished the case of Maruti Suzuki Ltd., emphasizing that it pertained to "inputs" and not "input services" as in the present appeals. Regarding the insurance cover for employees and their dependents, the Tribunal concurred with the A.R.'s stance that it lacked relevance to the appellant's business activities, thereby disallowing the credit on insurance services. However, for the other services, the Tribunal aligned with the appellant's position, relying on the Ultra Tech Cement Ltd. judgment, and allowed input service credit on all services except insurance cover for employees and their dependents. Consequently, the appeals were disposed of accordingly.

---